COMMON MISTAKES IN COMMERCIAL REAL ESTATE LOAN

Businesses usually seek financial assistance specifically when they are on the edge of expansion, acquisition of additional equipments or obtaining an additional project. That is why they apply for commercial loans. Here are some mistakes which may help you to be aware in securing your commercial loan.

• LACK OF RESEARCH ABOUT YOUR OPTIONS - You should see to it that you really had your homework done as what students do. Be responsible to review loan terms from one bank to another to pick the best one which may suit your preference.
• SELECTING A LESS EXPERIENCED LAWYER – You should hire a lawyer which may greatly negotiate to your prospective lenders. Seek the well experienced one who really specializes in this field.
• FAILURE TO PROVIDE A DEFINITE PLAN - Lenders want also to make sure where do you plan to use the money. Also they want to have a clear view of the timeframe for the completion of your target project. They want at the same time to be secure that you will be able to pay the amount that you owe them at the agreed time.
• NO BUSINESS PLAN – When asking for a commercial loan, a buyer should always have a detailed business plan indicating all the needed financial and operating data. This allows the lender to have an idea about the purpose of such loan.
• NO AVAILABLE CASH ON HAND – You should have some available cash on hand before applying commercial real estate loan. Lenders want to make sure that you also invested your own money in your business for commercial loans usually are for additional assistance only.
• NOT ANALYZING YOUR BALANCE SHEET – as a lender they are taking precautionary measures in order for them to be secure that the company they are giving such loan is capable enough to pay them. They use the balance sheet of the asking company to analyze the cash flow and their liabilities. They make it a point that you can still ran the company properly while paying your debts.

Hope these few tips could help you out.